Shohei Ohtani and Dodgers could change California Laws. Recently signed $700 million deal with the Dodgers
Shohei Ohtani the astonishing $700 million deal with the Los Angeles Dodgers has sparked controversy over this landmark structure. 4,444 The contract pays Ohtani just $2 million per season over the next 10 years, with the remaining $680 million carried over into the second decade after retirement.
The purpose of this delay strategy is to provide the Dodgers with salary cap flexibility to acquire additional players this season.
Statement by Cohen
The implications of the agreement extend beyond sports, but could trigger legal and tax changes. California instructor Malia M. Cohen called on the state and Congress to change the tax code and proposed a restriction on deferred contracts.
Cohenand’s argument focuses on addressing income inequality and ensuring a fair distribution of taxes, suggesting that unlimited deferrals by the wealthiest increase imbalances.
The current tax system allows unlimited deferrals for those lucky enough to be in the highest tax brackets, creating a significant imbalance in the tax structure,andquot; Cohen said in a statement.
andquot;The lack of reasonable deferral limits for the richest people increases income inequality and makes it difficult to fairly distribute taxes. I urge Congress to take immediate and decisive action to correct this imbalance.
Ohtaniand’s contract strategy includes potential tax breaks because he may not live in California after his service with the Dodgers ends in 2034.
By deferring payments, Ohtani could theoretically minimize state and income taxes, which are currently 13.3 percent, plus 1.1 percent for disability insurance.
Cohen’s proposal aims to recalibrate the tax treatment of Ohtani’s contract. Instead of taxing him based on $2 million in annual income, the proposal proposes to limit the delay and then apply the higher tax.
The move seeks to address the perceived loopholes and potential revenue loss associated with delaying large-scale contracts, reflecting broader concerns about tax fairness and income distribution.
